UPDATE 2: 2:46 a.m. ET 8/18/2023: Bidding for Delhi International Airport Ltd. or DIAL’s, seven-year listed, rated, redeemable, unsecured 9.75℅ non-convertible debentures totaling INR 7.44 billion ($89.6 million) will be held on Aug. 21, according to the terms of the NCDs seen by Reorg.
The proceeds of the NCD issue will be used to fund the tender offer of up to $102.8 million launched by its orphan special purpose vehicle – India Airport Infra for its $450 million 6.25% secured notes due October 2025, as reported.
The NCDs consist of an anchor portion for investment by anchor investors of up to INR 2.232 billion, or 30% of the issue size, according to the terms. The pay-in and allotment date for the NCDs is Aug. 22, the terms show. The NCD issue is proposed to be rated A+ by India Ratings & Research and ICRA Ltd.
The coupon will be reset after five years from the date of allotment with the final annualized coupon to be determined based on the repo rate prevailing at that time plus the spread, the terms of the NCDs show.
The issue is considered unsecured for the purposes of the Companies Act and Securities and Exchange Board of India regulations, but the obligations of the issuer under the NCDs are secured by first-priority liens on certain collateral, which consist of, to the extent permitted under the Operation, Management and Development Agreement, or OMDA. DIAL and the Airports Authority of India entered into an OMDA agreement on April 4, 2006.
Axis Bank, HSBC and ICICI Bank have been mandated as bookrunners for the NCD issue, as reported.
UPDATE 1: DIAL Plans to Issue INR 7.5B 7Y NCDs at 9.75% Coupon to Fund India Airport Infra USD Notes Tender Offer; Issue Launch to Hinge on Response to Tender Offer
UPDATE 1: 8:19 a.m. ET 8/9/2023: Delhi International Airport Ltd. or DIAL, will be issuing seven-year secured non-convertible debentures totalling INR 7.5 billion ($90.57 million) to fund the tender offer launched by its orphan special purpose vehicle – India Airport Infra for its $450 million 6.25% secured notes due October 2025, one source close and another familiar with the situation said.
India Airport Infra, formerly Cliffton Ltd., launched a tender offer on Aug. 4 to purchase up to $102.8 million of its originally $450 million 6.25% secured notes due October 2025, as
reported.
The NCDs will pay holders a coupon of 9.75% per annum, payable quarterly, and will be secured by DIAL’s airport assets, the sources said. Axis Bank , HSBC and ICICI Bank have been mandated as bookrunners for the NCD issue, the sources said. The company will be paying a fee of 50 bps to the arrangers, the sources said, adding that the NCDs issued will have a pricing reset clause after a duration of five years.
The launch of the NCD issue, dependent on bondholders’ response to the tender offer, is expected by the company to be mid next week, the sources said.
Meanwhile, two bondholders Reorg spoke to said that the price offered under the tender offer is not attractive enough, while the two others said that the response to the tender offer may be tepid not due to the price being offered but also due to a lack of new cash deployment opportunities available to the investors.
India Airport Infra is offering $987.5 per $1,000 in principal for its $450 million 6.25% secured notes due October 2025, prior to the early deadline on Aug. 17 at 5 p.m. New York Time, as reported. After the early deadline, India Airport Infra will offer $937.5 per $1,000 principal until the tender offer expires on Sept. 1 at 5 p.m. New York time, as reported.
HSBC declined to comment. GMR Group and Axis did not respond to requests for comment. An ICICI Bank spokesperson did not respond to a request for comment immediately.
– Malvika Joshi, Dipika Lalwani
Original Story 1:20 a.m. UTC on Aug. 9, 2023
India Airport Infra Launches Tender Offer for Up to $102.8M 6.25% Secured Notes Due 2024, Early Tender Consideration at $987.5 per $1,000 in Principal; Early Deadline Aug. 17
Relevant Document:
Announcement
India Airport Infra, formerly Cliffton Ltd., launched a tender offer on Aug. 4 to purchase up to $102.8 million of its originally $450 million 6.25% secured notes due October 2025, offering $987.50 per $1,000 in principal of the notes in respect for valid tenders prior to the early tender deadline of Aug. 17 at 5:00 p.m. New York time.
After the early deadline, India Airport Infra will offer $937.50 per $1,000 principal until the tender offer expires on Sept. 1 at 5 p.m. New York time, the announcement states.
The early settlement date is Aug. 24 and the final settlement date is Sept. 7. The company will also pay the accrued interest payment from, and including, the immediately preceding interest payment date for the notes to, but excluding, either on or about Aug. 24, the early settlement date or on or about Sept, 7, the final settlement date, the announcement states.
Consummation of the tender offer is conditional upon the company obtaining sufficient funds from the redemption of non-convertible debentures by Delhi International Airport Ltd., according to the announcement.
HSBC and J.P. Morgan Securities Plc are the dealer managers, while Morrow Sodali is the information and tender agent, according to the announcement.